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LNF - London Finance & Investment Group P.L.C. - Proposed Disposal of Investment Property London Finance & Investment Group P.L.C. (Incorporated in England - No. 201151) Code : LNF ISSN: GB0002994001 ("the Company") Proposed Disposal of Investment Property The Company is pleased to announce that it has agreed, subject to Shareholder approval, to dispose of the Company`s property in Rutland Gate, Knightsbridge, London (the `Property`) for a cash consideration of GBP2.625 million (the "Disposal"). The purchaser, Rutland Property Holdings Limited, and the Company have now exchanged contracts and therefore the Company will proceed towards completion once Shareholder approval has been obtained. As the Disposal represents more than 25% of the market capitalisation of the Company, the Company is required by the Listing Rules to seek Shareholder approval of the Disposal as a class 1 transaction. Such Shareholder approval will be sought at a General Meeting to be held shortly; Notice of the General Meeting will be contained in a Circular to Shareholders which is being drafted and will be mailed to Shareholders once the Circular has been approved by the relevant regulatory authorities. Details of the Property The Property was carried in the Company`s books on 30 June 2011 at GBP367,000 but was valued in July 2011 at GBP2,150,000 on an open market basis in accordance with valuation standards issued by the Royal Institution of Chartered Surveyors. An updated Property Valuation report will be included in the Circular. The Property is leased to Marshall Monteagle PLC, a company controlled by trusts associated with Mr. D.C. Marshall and Mr. J.M. Robotham, Directors of the Company. The Property has been let on the basis that the tenant meets all costs related to the Property and pays a rent which up to 1 January 2009 was GBP27,000 p.a., from 1 January 2009 to 30 September 2011 was GBP40,000 p.a. and from 1 October 2011 has been increased to GBP53,000. No costs relating to the Property such as maintenance and repairs have been borne by the Company i.e. the rental income is both the gross and net income from the Property. As a consequence of the Disposal, rental income from the Property will decline by GBP53,000 in the next 12 months. This would have been a return of 2.5% based on the July 2011 valuation of the Property. If the sale proceeds are not re-invested, and the bulk of the proceeds are used to repay all of the Company`s borrowings, the Directors estimate that the effect on earnings will be a reduction of approximately GBP15,000 per annum assuming that interest earned on surplus cash deposits is 1% and base rates remain at 0.5%. Each extra 1% that can be earned on the surplus cash deposits will increase after tax earnings by approximately GBP3,000 per annum. If all the Disposal proceeds are re-invested and achieve a similar yield (3.6% before tax) to the Company`s existing General investment portfolio, earnings will increase by approximately GBP23,000 per annum. The actual effect on earnings will depend on the extent and speed with which sale proceeds are re-invested. Completion of the Disposal will provide the Company with: - cash proceeds of approximately GBP2.35 million (net of transaction costs and tax); - a strengthened balance sheet reflecting the cash proceeds; - reduced exposure to a single property which represented in excess of one-fifth of the assets of the Company; - an opportunity to redeploy capital in line with the investment policy of the Company. The Company will make a further announcement when the Circular has been posted to Shareholders. 4 November 2011 Sasfin Capital (a division of Sasfin Bank Limited) Enquiries: London Finance & Investment Group P.L.C. Lloyd Marshall Tel: 020 7448 8950 Beaumont Cornish Limited, Sponsor Roland Cornish Tel: 0207 628 3396 Date: 04/11/2011 13:00:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
